Perhaps they could reconsider their offshore tax-avoidance schemes to help get Blighty back on its feet too.

Or maybe not.

And perhaps they could reconsider their policy of low wages subsidised by tax credits. Or their policy of destroying communities and local shops. My enemy’s enemy is not necessarily my friend.

Tesco would presumably be hurt more by VAT going up 2.5% than national insurance going up a penny.

They’re doing what all the businesses that support the Tory plans are doing, acting in their own interest with no regard for the economy as a whole. (In fact, maybe deep public service cuts and a million more unemployed would drive down wages further, so be much better for the businesses who have supported the Tories than a penny on national insurance – not good for the rest of us though!)

Sunny, he’s not backing labour’s proposals either is he? He’s being non-committal, hedging the corporation’s bets and trying to make out Tesco only wants what’s best for the nation (as if) as opposed to what’s best for its bottom line, long-term (they play a long game:witness the land-banks etc)

The only reason the Tories are getting away with this is because they have not spelt out which tax they will raise. Until they say which tax they will raise, it’s not prudent to berate Labours proposal of a NI raise of 1p, as this may come back to bite themon the bum. This is like Anne Widicombe (bless her) saying marriage is a great institution, but not actually marrying herself and sustaining a successful marriage.
It is Labours job and the public/media to get the Tories notions on what tax they will raise. For the Tories to suggest it can be done by public sector cuts and efficiency isn’t good enough because all other parties have suggested this too.
Not being forthright is the deception the Tories are playing.

Er he didn’t exactly say “we reject the tories NI proposal” did he ??

Tesco is a conservative organisation – they were owned by Shirley Porter at one point

@ 5 – VAT will go up to 20%, and quite right too. At least you can avoid VAT to some extent, and it will discourage consumption, so I’m surprised the green/left are so anti TBH.

Matt Munro – Yes you would think a VAT rise will cut consumption, but if consumption is cut then the very businesses who have come out against the NI raise, will lose revenue and will most probably have to cut jobs. This is the very thing they are arguing against the NI raise. So will the Tories add VAT to food? This is something people can not avoid.

Indeed, one argument for raising employer’s NI is that it’s bloody hard for the likes of Tesco to get out of paying it…

Sure, but as a means of raising tax – I’d rather go for National Insurance than a VAT rise. Which is why I think Tesco’s stance here is worth supporting.

No VAT is better. Ask any economist. Right. Left. Whatever. Look at the debate over in America for instance, where they don’t have a consumption tax at the federal level, unlike most other developed nations.

VAT is less distortionary to the economy, while raising a lot of money very easily.

And yes, VAT is a regressive tax. Which is why it’s important to redistribute some of the money raised back to low and middle income people in the form of tax credits, making the system progressive (Left Foot Forward had this same problem before – claiming that the Lib Dem threshold raise to £10,000 would be regressive, even though it’s funded by hitting the rich).

And this isn’t some ivory tower angels on pins nonsense: how do you think the Scandinavian countries fund their juicy welfare system?

But saying all that, I just don’t see where the demand in the economy is going to come from, so any main tax rise next year may be counterproductive (never mind the Tory absurdity of opposing a tax rise next year, but wanting spending cuts THIS year). But if it goes as the budget figures think it will go over the next year, then this sort of tax rise won’t be too bad.

Surely “Tesco noncommittal” would have been the accurate headline?

@11 Alex

I’m certainly not convinced that increasing VAT is the panacea you seem to think. It’s obviously part of the solution, but I don’t think pushing rates up to Scandinavian levels and then using tax credits to protect the poorest sectors of society from the regressive effects is so obviously the answer.

You can’t have something for nothing, and I for one would far rather see direct taxation increase than VAT and other indirect go up, not that I’m holding out much hope given New Labour’s past record.

The Tories need to be challenged a lot more strongly on this fixation with the proposed NI rise. Hopefully it will come back and bite them, but so far they are being given a pretty easy time of it by the opposition. Their sums don’t stack up, and it’s only to be expected that their chums in business will support them.

It is to the credit of Tesco that they haven’t supported either side, whatever problems you have with their activities in general. It’s all very well for Stewart Rose et al to complain about a fairly insignificant rise in NI…but I don’t hear any constructive suggestions from these business leaders (or the Tories) about where the money is going to come from!

@ Sunny (10). Aye, but what is Tesco’s stance? Some corporate guff about just wanting what’s best for the nation. No backing for NI hikes, nor for VAT leaps. No backing for Tories nor for Labour, just mealy-mouthed insincere platitudes while awaiting the election results when they’ll know exactly whom to butter up..

@14 Alisdair Cameron

I have no particular love for Tesco, or their competitors, but find their stance preferable to the rent-a-mob who have come out to attack the NI rise. This is one, fairly minor, issue in the whole equation of balancing cuts, “savings” and tax rises. I don’t need a lot of Tory stooges telling me what a disaster for jobs it would be, because I don’t trust their judgement or motives. Perhaps they could offset this comparatively trifling rise in NI against their huge bonuses/pensions/party political contributions…?

@ Galen10, FWIW, I believe that whoever gets in, we’ll end up seeing a rise in both NI and VAT, plus umpteen other tax rises.What I can’t see in the Tesco statement is anything other than a corporate decision not to get dragged in to a politically partisan slanging-match, and that’s why I can’t work out how Sunny is pitching this as a rejection of the Tories and their plan: it’s not, it’s a deliberate steering clear and standing aside, not getting drawn in on either side, in order to preserve their influence whoever wins.

Too late.

http://www.thedailymash.co.uk/politics/politics-headlines/brown-deafened-by-sound-of-collapsing-argument-201004082624/

Nice piece of spin, Sunny…

Tesco insisted that it had a long-standing policy of neutrality on party politics and that the company was not explicitly backing the Government’s position

How does that translate to a rejection of Tory plans?

I’m certainly not convinced that increasing VAT is the panacea you seem to think. It’s obviously part of the solution, but I don’t think pushing rates up to Scandinavian levels and then using tax credits to protect the poorest sectors of society from the regressive effects is so obviously the answer.

You can’t have something for nothing, and I for one would far rather see direct taxation increase than VAT and other indirect go up, not that I’m holding out much hope given New Labour’s past record.

Sorry, could you please explain your reasoning? You’ve stated you disagree with me, but I don’t see why.

What this man and hundreds like him fail to realise that they are advocating is in fact, as David Cameron rightly out it, is a tax on jobs.
Employer NIC’s is money going direct to Government instead of the employee – it’s a back door income tax.

http://www.hmrc.gov.uk/rates/nic.htm

Income Tax and NIC lower earnings limits are now broadly similar. Additionally, Employers AND Employees pay a surcharge of 1% above the upper earnings limit – in effect income tax is for these earners 21% and for the higher rate taxpayer 41% and 51% respectively.

If we take the Upper Earnings limit as an example (which was raised by 3 times the real cost of inflation i.e. 10% for 2009-2010 to £844) the lower limit for full NIC contribution is £110.
Between £844 less £110 everyone pays 11%. The employer pays 12.8%. AND for those qualifying a NIC of 1% for earnings above this.

It is estimated that National Insurance contributions (NICs) will raise £94.9 billion in 2009-10. This compares with estimated Exchequer receipts from income tax of £134.1 billion, from VAT of £67.2 billion and from corporation tax of £33.4 billion.
(Taken from; HM Revenue & Customs, National statistics: HMRC annual receipts (Table T1.2), March 2010. This is published at: http://www.hmrc.gov.uk/stats/tax_receipts/table1-2.pdf

When Labour came to power in 1997 the rates were £62 to £450 at 10%
Now they are a massive £95 to £844 at 11% with 1% rate for employees above this. Employers enjoyed a tapered contribution between 3 and 10% then 10% above the upper limit in 1997 yet now pay a whacking great 12.8% across the board.

David Potts comment enjoys an audience the same as anyone elses. But he also has to accept that if we as a country had not gone into this crisis already £400 Billion in the red we would not be in the mess we are now. For one thing we would not be having to pay back £57 Billion pounds in interest charges a year.

Tax is not required. Cuts are. If you cannot afford something at home you go without. Why is Labour so intent on shoving things down this country’s throat that we ALL know we cannot afford.